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Indonesia energy ministry issues decree on hydro power plant tariff

JAKARTA ( – The Energy and Mineral Resources Ministry has issued a ministerial decree (Number 19/2015) that sets more attractive tariff for electricity to be purchased by the State electricity company PT PLN from hydro power plants with capacity of less than 10 megawatt hour (MW).

Under the new decree, which was signed by the Energy and Mineral Resources Minister Sudirman Said on June 29, 2015, the price of electricity purchased from hydro power plants will include the cost for setting up power grid from power plant to PLN’s power grid.

The price is set in the power purchase agreement (PPA) without tariff negotiation and without price escalation. “The price is also applies since the power plant starts its commercial operation date (COD),” the energy ministry said in a statement.

The electricity tariff applies for 20 years since the COD and is set at US$9.30 cents per kWh times multiplier factor. Assuming rupiah is Rp13,000, then the tariff is 9.30 cent USD times 13,000 equals to Rp1,209 per kWh.

The new decree replaces previous decree (No 12/2014).

The energy ministry hopes that the new decree will encourage investors to develop hydro power plants. The Indonesian government plans to build 160 units of hydro power plants in 2015-2019 with combined capacity of 5,822 MW. (*)



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